Sports Direct pain after England defeat

Sports Direct, which is majority-owned by billionaire Mike Ashley, said last night's disastrous loss at Wembley will hit sales of England replica kits, a "must-have" item among fans in the build-up to major tournaments.

England shirt maker Umbro also predicted a dismal build-up to Euro 2008, particularly as it is due to launch a new red away kit for the England team ahead of the tournament. Without England in the competition, demand for the jersey is expected to be minimal.

Shares in Sports Direct tumbled 17½p to an all-time low of 95p today, giving Ashley a £71 million paper loss. Umbro continued its recent falls with a slide of 5½p to 169p. Other sports shops also suffered with JJB Sports sinking 11¾p to 134p.

Sports Direct was recently optimistic about this year's results, but today said: "As England have not qualified for the 2008 European Championships, the company can no longer be confident of achieving that level of financial performance."

It added that profits for the year are "likely to be below that achieved in the last year".

The Sports Direct warning was the latest in a string of bad news for the Sports World and Lillywhites owner. Shares floated at 300p earlier this year, netting £929 million for Ashley, who also owns Newcastle United and has a 29% stake in Umbro.

The dismal performance of the England team under manager Steve McClaren has seen sales of replica kits tumble in recent months. Umbro, which last month agreed to a £285 million takeover by US rival Nike, today warned that last night's result made things even worse.

"The reduced levels of England home jersey sell-through in 2007 and England's failure to qualify for the European Championships will have some effect on revenues in the current financial year," said Umbro.

"The effect on 2008 revenues, though still unclear, will be more pronounced due to a substantial reduction in our expected sales volumes of the new away jersey."

Last night's defeat could cost the British economy as much as £1.5 billion as pubs, bookies, retailers and travel firms suffer.

It was a good night for the bookmakers who made a killing on patriotic England fans betting on McLaren's side to win. However, they now face a bleak summer in 2008. British bookies took bets worth £1 billion during the football World Cup in 2006, and analysts reckon that punters would have wagered even more during the European Championships if the England side had qualified.

Instead, bookies were today scaling back their forecast with last summer's bonanza just a distant memory.